Insurance is funny in Ontario
11-15-12, 02:45 PM
#1
Insurance is funny in Ontario
We often have some good insurance discussions in this here Canadian section, and I'm recently bewildered YET AGAIN by our wonderful insurance system in Ontario so I thought I'd share this so we can discuss some more!
Would someone like to explain to me how a 1998 base-of-the-base-models protege is more expensive to insure than a two-door convertible "sports-car"?
Last year I bought a shitty little protege to drive in the winter so I wouldn't be putting the Drama Queen through the salty winters here anymore (only did it for 2 years, but that's enough to start a rust bubble or two). It cost me about $20 more per month than the Rx-7. I called to switch over from Rx-7 to Protege, now that I'm putting it back on the road in the next couple weeks and it has gone up another $10/month since last year, whereas the Rx-7 hasn't increased in the 3-ish years I've had it insured...
I know, I know... the Protege is a newer car, more frequent on the road, and the convertible is slow (protege is still slower, at an asphalt-scorching 80hp), but it's got no collision and no theft on it!(I think...)
Somehow, the convertible FC is in the lowest possible class of insurance in Ontario.
Anybody else scratching their heads at funny things like this with their insurance?
Would someone like to explain to me how a 1998 base-of-the-base-models protege is more expensive to insure than a two-door convertible "sports-car"?
Last year I bought a shitty little protege to drive in the winter so I wouldn't be putting the Drama Queen through the salty winters here anymore (only did it for 2 years, but that's enough to start a rust bubble or two). It cost me about $20 more per month than the Rx-7. I called to switch over from Rx-7 to Protege, now that I'm putting it back on the road in the next couple weeks and it has gone up another $10/month since last year, whereas the Rx-7 hasn't increased in the 3-ish years I've had it insured...
I know, I know... the Protege is a newer car, more frequent on the road, and the convertible is slow (protege is still slower, at an asphalt-scorching 80hp), but it's got no collision and no theft on it!(I think...)
Somehow, the convertible FC is in the lowest possible class of insurance in Ontario.
Anybody else scratching their heads at funny things like this with their insurance?
Last edited by CS13B; 11-15-12 at 02:48 PM.
11-15-12, 04:29 PM
#2
Full Member
iTrader: (1)
Join Date: Mar 2010
Location: Canada, Ontario, Kitchener
Posts: 235
Likes: 0
Received 0 Likes
on
0 Posts
I went through pretty much the same thing. I was getting quotes when I was looking for a daily driver in the spring. I though it would be cool to get an older WRX(2004) as they aren't overly expensive and still a cool car(and they are awd for the winter). At the time a family friend was selling a 2002 4door beige civic so I also got quotes for that. Both with the same basic coverage and the Civic was more! I asked how a turbo charged sports car that is also newer and more expensive could be cheaper than the granny civic and their response was that stats show that civics are in more accidents than any other car. DUHHHHH! Thats because there are more civics on the road then any other car. In the end I bought that civic and dont have a cool daily driver 
. Good thing I have a nice Rx7 in the garage 
. Good thing I have a nice Rx7 in the garage
11-15-12, 05:09 PM
#3
Rotary Freak
iTrader: (28)
Join Date: Jun 2009
Location: Ontario, Canada
Posts: 2,089
Likes: 0
Received 0 Likes
on
0 Posts
I've had two Toyota Echos as daily drivers. My newer one cost more even though I did not have collision. I only had liability.
When I asked why my rates were higher since the value of my car shouldn't be a factor I got a great reply. The newer echo is less safe and if you are in an accident you have a greater chance of being injured.
WTF!
When I asked why my rates were higher since the value of my car shouldn't be a factor I got a great reply. The newer echo is less safe and if you are in an accident you have a greater chance of being injured.
WTF!
11-15-12, 05:27 PM
#4
You guys are thinking about it the wrong way. The way insurance is calculated is not only by your history but also by how expensive the car is to fix, as well history of accidents. Civic may be a cheap car but its OE parts are not cheap. That is what companies look at. They don't care if its faster or if it has a turbo, only how often it gets into accidents and how much it costs to fix.
As an example, RX-8 is a terrible car insurance wise. Not because its a sports car but because bad drivers get lots of accidents with it (probably cause its very tail happy in the wet/snow) and then Mazda OE parts are expensive so makes it even worse.
thewird
As an example, RX-8 is a terrible car insurance wise. Not because its a sports car but because bad drivers get lots of accidents with it (probably cause its very tail happy in the wet/snow) and then Mazda OE parts are expensive so makes it even worse.
thewird
11-15-12, 06:44 PM
#5
Likes to swear....alot
iTrader: (3)
Join Date: Dec 2002
Location: Kitchener Ontario Canada
Posts: 3,791
Likes: 0
Received 3 Likes
on
3 Posts
I had a 1993 Dodge Ram 250 5.9L Cummins truck which I just sold and was paying $180/month for it
I priced out insurance on a 2005 Porsche Cayenne S....$180/month.
How does that make sense? Its great for me, because now I know I can actually afford to insure a Cayenne!
I priced out insurance on a 2005 Porsche Cayenne S....$180/month.
How does that make sense? Its great for me, because now I know I can actually afford to insure a Cayenne!
11-15-12, 06:59 PM
#6
"They don't care if its faster or if it has a turbo, only how often it gets into accidents and how much it costs to fix."
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
11-15-12, 07:01 PM
#7
"They don't care if its faster or if it has a turbo, only how often it gets into accidents and how much it costs to fix."
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
thewird
Trending Topics
11-15-12, 08:21 PM
#11
Thats just it. no way 92 civic parts are more expensive than 3 gen parts. im certain it has do with being on that top 10 list of cars being broken in to that attributes it to being so much to insure, that and teenage death / race related accidents. every 1 rx7 on the road = 100 civics easily .
11-15-12, 10:43 PM
#13
Yea Marco I do understand the logic to what you're saying but by that same logic, my Rx-7 could/should be more expensive because the OE parts to repair are WAY more expensive. I'm thinking, rear hub vs rear hub, front suspension arms vs. front suspension arms, rad vs. rad, fender vs. fender. The protege is a stupid-cheap car to fix, even without my employee discount!
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
Last edited by CS13B; 11-15-12 at 10:48 PM.
11-15-12, 11:34 PM
#14
Yea Marco I do understand the logic to what you're saying but by that same logic, my Rx-7 could/should be more expensive because the OE parts to repair are WAY more expensive. I'm thinking, rear hub vs rear hub, front suspension arms vs. front suspension arms, rad vs. rad, fender vs. fender. The protege is a stupid-cheap car to fix, even without my employee discount!
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
thewird
11-16-12, 08:09 AM
#15
So far, in this thread, thewird is providing the most accurate information.
I'm a Registered Ontario Insurance Broker so I know quite a bit about this, we've had quite a few different insurance topics on here in the two years I've been a member and I've done my best to set straight the misconceptions that are out there.
Time to start again.
First off, the value of a vehicle has nothing to do with what you'll pay for insurance. Zero. Zip. Nada. HOWEVER the value of a vehicle can determine your eligibility with certain companies.
For example: A current client of mine has a 2008 Merc S450v 4Matic. This car's MRSP is $106k new. Pafco insurance in Ontario will not write vehicles that listed new at over 100k. Doesn't matter if the vehicle is worth that now (which we all know it's not) it only matters what it listed new. However Jevco insurance won't write vehicles that were bought for over $80k. My client purchased his car for $66k and was able to provide a bill of sale proving this. I was able to secure him coverage with Jevco. The price he pays with Jevco does not vary if I change the price of the vehicle in the quoting software.
After explaining this, the next logical question is: Well what IS taken into account on a vehicle in determining what it costs?
The answer is: Rate Groups.
Rate Groups are a set of values assigned to variables in equations that determine what you pay for your insurance.
Each vehicle has four rate groups assigned to it:
DCPD (Direct Compensation Property Damage)
AB (Accient Benefits)
COLL (Collision)
COMP (Comprehensive)
Each category is assigned a numerical value, each company *CAN* have their own values for a vehicle, but 98% of the time they are the same. If they vary it is usually by only one point. A higher number in a rate group category, for lack of better terms means you pay more.
For example a 1988 FC Vert has the following rate groups (Jevco):
DCPD 05
AB 27
COLL 05
COMP 04
A 1998 Mazda Protege "Base of the base" has the following rate groups (Jevco):
DCPD 12
AB 36
COLL 08
COMP 05
Alone and of themselves these numbers don't mean much. In loose terms and I do mean loose they mean this:
DCPD is weighted in how much the company is going to have to pay to fix your car. This number can be affected by availability of parts, potential labour costs, cost of parts and the anticipated amount of damage done in a crash that does not write off the vehicle. This number decreases with vehicle age (often) as your car's book value decreases with age. This means that eventually they company will almost always write off your vehicle and thus they don't have to worry about part costs and labour.
AB is the BIG ONE. This category has by leaps and bounds the greatest effect on the cost to insure a vehicle. A one point change here can have more effect than a 6+ point change in any other category. AB is the company trying to determine how much they're going to have to pay in medical bills for you if you are injured in a crash. They also have to try and determine how much in medical bills they are likely to pay for anyone you injure in a crash, passengers, pedestrians and other drivers. (If you hurt someone bad enough their insurance company will attempt to subrogate against your company to get their medical bills paid).
Many factors go into AB because AB claims can be financially fatal to an insurance company. The company does not care about you writing off your Brand new $25,000 civic. This is pennies to them. They'll give you the money and walk away laughing if no medical bills are paid out. But when you become a vegeteble from a crash and need 24 hour medical care for the rest of your life, they are shitting their pants at the million (or more) they're on the hook for.
COLL is very similar to DCPD. It pertains to your at-fault collisions but is generally lower as you pay a deductible which transfers a bit of risk away from the company and back on to you.
COMP is for physical damages not arising out of transportational losses or simply put non-moving accidents. Again it is for physical repairs, but it is less likely your vehicle will have a tree fall on it than it is to be hit (or for you to hit someone else).
*DISCLAIMER*
I have very loosely outlined these categories and they should not be taken as gospel. I have given you an idea of what they mean but I have also left boring bits out. I have also not finished my morning coffee as I write this.
Further posts to come as I read individual replies.
-Geoff
I'm a Registered Ontario Insurance Broker so I know quite a bit about this, we've had quite a few different insurance topics on here in the two years I've been a member and I've done my best to set straight the misconceptions that are out there.
Time to start again.
First off, the value of a vehicle has nothing to do with what you'll pay for insurance. Zero. Zip. Nada. HOWEVER the value of a vehicle can determine your eligibility with certain companies.
For example: A current client of mine has a 2008 Merc S450v 4Matic. This car's MRSP is $106k new. Pafco insurance in Ontario will not write vehicles that listed new at over 100k. Doesn't matter if the vehicle is worth that now (which we all know it's not) it only matters what it listed new. However Jevco insurance won't write vehicles that were bought for over $80k. My client purchased his car for $66k and was able to provide a bill of sale proving this. I was able to secure him coverage with Jevco. The price he pays with Jevco does not vary if I change the price of the vehicle in the quoting software.
After explaining this, the next logical question is: Well what IS taken into account on a vehicle in determining what it costs?
The answer is: Rate Groups.
Rate Groups are a set of values assigned to variables in equations that determine what you pay for your insurance.
Each vehicle has four rate groups assigned to it:
DCPD (Direct Compensation Property Damage)
AB (Accient Benefits)
COLL (Collision)
COMP (Comprehensive)
Each category is assigned a numerical value, each company *CAN* have their own values for a vehicle, but 98% of the time they are the same. If they vary it is usually by only one point. A higher number in a rate group category, for lack of better terms means you pay more.
For example a 1988 FC Vert has the following rate groups (Jevco):
DCPD 05
AB 27
COLL 05
COMP 04
A 1998 Mazda Protege "Base of the base" has the following rate groups (Jevco):
DCPD 12
AB 36
COLL 08
COMP 05
Alone and of themselves these numbers don't mean much. In loose terms and I do mean loose they mean this:
DCPD is weighted in how much the company is going to have to pay to fix your car. This number can be affected by availability of parts, potential labour costs, cost of parts and the anticipated amount of damage done in a crash that does not write off the vehicle. This number decreases with vehicle age (often) as your car's book value decreases with age. This means that eventually they company will almost always write off your vehicle and thus they don't have to worry about part costs and labour.
AB is the BIG ONE. This category has by leaps and bounds the greatest effect on the cost to insure a vehicle. A one point change here can have more effect than a 6+ point change in any other category. AB is the company trying to determine how much they're going to have to pay in medical bills for you if you are injured in a crash. They also have to try and determine how much in medical bills they are likely to pay for anyone you injure in a crash, passengers, pedestrians and other drivers. (If you hurt someone bad enough their insurance company will attempt to subrogate against your company to get their medical bills paid).
Many factors go into AB because AB claims can be financially fatal to an insurance company. The company does not care about you writing off your Brand new $25,000 civic. This is pennies to them. They'll give you the money and walk away laughing if no medical bills are paid out. But when you become a vegeteble from a crash and need 24 hour medical care for the rest of your life, they are shitting their pants at the million (or more) they're on the hook for.
COLL is very similar to DCPD. It pertains to your at-fault collisions but is generally lower as you pay a deductible which transfers a bit of risk away from the company and back on to you.
COMP is for physical damages not arising out of transportational losses or simply put non-moving accidents. Again it is for physical repairs, but it is less likely your vehicle will have a tree fall on it than it is to be hit (or for you to hit someone else).
*DISCLAIMER*
I have very loosely outlined these categories and they should not be taken as gospel. I have given you an idea of what they mean but I have also left boring bits out. I have also not finished my morning coffee as I write this.
Further posts to come as I read individual replies.
-Geoff
Last edited by CloudPump; 11-16-12 at 08:12 AM.
11-16-12, 08:23 AM
#16
"They don't care if its faster or if it has a turbo, only how often it gets into accidents and how much it costs to fix."
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
Not true at all. a turbo vs none turbo makes a huge difference. though what you said is applied too, but turbo / supercharged will play a role same with engine size.
Horsepower is not a factor in insurance.
Yes the turbo car is faster, so yes you can theoretically do more damage. However insurance assumes you are obeying the laws of the road. Insurance covers your *NEGLIGENT* actions. Not your *INTENTIONAL* ones. You may be negligent by accidentally speeding (because we all know no one speeds on purpose!) and cause a bigger accident. But if you are intentionally speeding (very hard to prove it was intentional) you are breaking the law with intent and your policy will only cover the provincially mandated bare miniums ($200,000).
In practice I can't think of a single case off the top of my head where intentional speeding was proven and a claim denied.
Most cases (read: almost all) of drinking and driving carry no coverage in the event of a claim except for the provincially mandated minimums.
-Geoff
11-16-12, 08:27 AM
#17
BECAUSE the FD's parts are so expensive it's very easy for the insurance company to say the cost of the repair exceeds the depreciation of the vehicle and write it off.
Case in point: The "Salvaged" FD at auction thread that is floating around the canadian forums. The damage to that car didn't look all that severe but the car was written off by insurance.
-Geoff
11-16-12, 08:29 AM
#18
Yea Marco I do understand the logic to what you're saying but by that same logic, my Rx-7 could/should be more expensive because the OE parts to repair are WAY more expensive. I'm thinking, rear hub vs rear hub, front suspension arms vs. front suspension arms, rad vs. rad, fender vs. fender. The protege is a stupid-cheap car to fix, even without my employee discount!
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
Stats are ultimately what rule the insurance market regardless of any other factor we can logically think of, I'm sure. If there was a sudden influx of Rx-7's in Ontario I bet we'd see our insurance skyrocket.
The RX7 gets written off before it gets repaired. The protege being cheap to fix means that the repair won't exceed it's value and will be fixed thus providing the opportunity for future claims that will get fixed. The likelihood that a claim will be paid is taken into account in insurance
-Geoff
11-16-12, 08:33 AM
#19
****************NOTE******************
I feel I should put this out there as well:
Rate groups and potential payouts as well as likelihood of claims are all still a very small factor in your insurance costs overall.
When it comes down to it the vehicle is one of the least important factors in your insurance costs.
Where you live, tickets, at fault losses, class of license, number of years of prior insurance and other factors have MUCH more to do with what you pay.
-Geoff
I feel I should put this out there as well:
Rate groups and potential payouts as well as likelihood of claims are all still a very small factor in your insurance costs overall.
When it comes down to it the vehicle is one of the least important factors in your insurance costs.
Where you live, tickets, at fault losses, class of license, number of years of prior insurance and other factors have MUCH more to do with what you pay.
-Geoff
11-16-12, 10:09 AM
#21
Rotary Freak
Geoff, you are being way to logical and informative. It is way batter to think that "DA MAN" is stupid and doesn't know stuff about cars.
Like why does it cost more to insure my 1976 F250 than my Jag! Oh yeah, when I look into it, it actually doesn't but the intial breakdown sure looked like it if you ignore the details, LOL.
Thanks a lot for the information.
Eric
Like why does it cost more to insure my 1976 F250 than my Jag! Oh yeah, when I look into it, it actually doesn't but the intial breakdown sure looked like it if you ignore the details, LOL.
Thanks a lot for the information.
Eric
11-16-12, 01:08 PM
#22
Full Member
iTrader: (1)
Join Date: Mar 2010
Location: Canada, Ontario, Kitchener
Posts: 235
Likes: 0
Received 0 Likes
on
0 Posts
Good information Geoff, thanks.
Why is it that if its a pretty standard rating between companies that when getting quotes on the same vehicle the quotes can be so different?
Any advice or recommendations for insuring a FC for 21 year old. Not a dd but just a sunday driver kind of thing?
Luke
Why is it that if its a pretty standard rating between companies that when getting quotes on the same vehicle the quotes can be so different?
Any advice or recommendations for insuring a FC for 21 year old. Not a dd but just a sunday driver kind of thing?
Luke
11-16-12, 03:30 PM
#23
Good information Geoff, thanks.
Why is it that if its a pretty standard rating between companies that when getting quotes on the same vehicle the quotes can be so different?
Any advice or recommendations for insuring a FC for 21 year old. Not a dd but just a sunday driver kind of thing?
Luke
Why is it that if its a pretty standard rating between companies that when getting quotes on the same vehicle the quotes can be so different?
Any advice or recommendations for insuring a FC for 21 year old. Not a dd but just a sunday driver kind of thing?
Luke
The answer in layman's terms is this:
While companies almost always use the exact same rate groups (or very very similar ones) the formula's these numbers get pumped into are very different
Think of it like a math problem.
DCPD = 12
AB = 36
COLL = 8
COMP = 5
Company A determines your rate by 40(DCPD) + 37(AB) + 10(COLL) + 13 (COMP)
Company B determines your rate by 22(DCPD) + 48(AB) + 19(COLL) + 9 (COMP)
While the variables are the same the resultant answers are different.
As for advice on your insurance...
Insurance sucks for anyone under 25.
The best ways to save money are:
Get your G as soon as you are able to. This doesn't necessarily unlock magical cheap rates, but it makes you eligible to earn discounts that aren't available to G2 drivers. If you have a G2 you are considered a novice driver, no matter how long you've had it for.
If you're under 25, it doesn't matter much if you DD your car or not. Once you're 25 or older you can move from a class 02 (daily driver) to a class 01 (not daily driven).
-Geoff
(EDIT)
The math problems presented above bear no resemblence to what the real math problems that are used to calculate your insurance.
11-16-12, 04:18 PM
#24
Full Member
iTrader: (1)
Join Date: Aug 2009
Location: Toronto, Canada
Posts: 115
Likes: 0
Received 0 Likes
on
0 Posts
The best ways to save money are:
Get your G as soon as you are able to. This doesn't necessarily unlock magical cheap rates, but it makes you eligible to earn discounts that aren't available to G2 drivers. If you have a G2 you are considered a novice driver, no matter how long you've had it for.
If you're under 25, it doesn't matter much if you DD your car or not. Once you're 25 or older you can move from a class 02 (daily driver) to a class 01 (not daily driven).
-Geoff
Get your G as soon as you are able to. This doesn't necessarily unlock magical cheap rates, but it makes you eligible to earn discounts that aren't available to G2 drivers. If you have a G2 you are considered a novice driver, no matter how long you've had it for.
If you're under 25, it doesn't matter much if you DD your car or not. Once you're 25 or older you can move from a class 02 (daily driver) to a class 01 (not daily driven).
-Geoff
Anyway, I've had my G for about 2 years now, G2 was from 17 to 20-21ish.
03 Jetta 1.8T @ 112/month - DD
FD @ 140/month. - Summer Weekend Fun.
But I'm under my dad's policy. Both cars are registered to him so I save on insurance. I'm the primary driver on both cars, he's primary under the family minivan.
How would the insurance companies see this when I move onto my own insurance? I've looked at online quotes from various places and just the Jetta alone would cost $270~....
I'm not planning on going under my own policy anytime soon. Was just wondering if there's anything that would hinder me from getting better rates. I figure I'd have at least 3 more years before I'd have to go get my own insurance,
11-16-12, 05:59 PM
#25
Go figure:
2009 RX-8 R3 $760 yearly (also winter driven) alternate in winter every 3 weeks as my wife car pools with the Vibe every third week.
1992 RHD FD RX-7 $670 yearly no restrictions but basically a (summer car)
Beater/Junk Hauler: 2004 Pontiac Vibe $ 800 Yearly
Yes, insurance in Ontario is nuts!
I'm a really old fart, monthly insurance home auto etc. $369 with $300 deductible across the board (Big Corporate Group Plan)
2009 RX-8 R3 $760 yearly (also winter driven) alternate in winter every 3 weeks as my wife car pools with the Vibe every third week.
1992 RHD FD RX-7 $670 yearly no restrictions but basically a (summer car)
Beater/Junk Hauler: 2004 Pontiac Vibe $ 800 Yearly
Yes, insurance in Ontario is nuts!
I'm a really old fart, monthly insurance home auto etc. $369 with $300 deductible across the board (Big Corporate Group Plan)
Last edited by RXeckless; 11-16-12 at 06:07 PM. Reason: Old Fart